Structure of Public Governance Institutions and Their Impact on Delocalisation of Labour-Intensive Industries

The public governance issues and their impact on labour intensive industries are the main problems discussed in this paper. The governance possibilities at global, EU, national, local and sector levels are described. Policies have been applied in different fields like industrial policy, innovation policy, foreign trade, foreign direct investments (FDI), labour relations, taxes and subsidies, support to clusters, support to local companies to improve position in the value chain. A matrix that links together levels and fields of policies has been developed for analysis. One important aspect is related to discussion of EU governance models in innovation and labour market policies. The issue is linked closely to the general choice between more market based or more intervention based policies and determines the scale and scope of measures applied at the EU level and their influence through harmonisation efforts on national policies. The role of multinational enterprises (MNE) and their relationships with different level governing institutions is another important factor. The critical areas where economic interests of MNEs and policy goals of governing institutions meet are labour market regulations, FDI related problems, conditions for foreign trade, innovation, taxation and state aid. Subcontracting, outsourcing, off-shoring and offshore outsourcing, value chain and clusters are the specific concepts that describe forms in which organisational and technological capacities have been matched together. One task of the current paper has been to clarify those concepts and to formulate research questions for further empirical study in the field of electronics, software, garment and footwear industries.